Take-Two reports solid earnings and explains GTA VI delay

Take-Two Interactive Software let the cat out of the bag as it postponed the launch of Grand Theft Auto VI (now coming on May 26, 2026), and now we can see the impact of that on its outlook.

The company reported its net bookings for the fourth-fiscal quarter ended March 31 hit $1.58 billion, up 17% from the same quarter a year ago. The results were in the top end of the company’s own guidance.

Good results for NBA 2K25, Grand Theft Auto Online and Grand Theft Auto V, Civilization VII, Toon Blast, Match Factory, Empires & Puzzles, Red Dead Redemption 2 and Red Dead Online and WWE 2K25.

The company said that giving Rockstar Games more time to finish Grand Theft Auto VI will improve quality, and it noted that its most recent trailer on GTA VI got 475 million views in 24 hours, up from the announcement trailer of 93 million views.

GAAP net revenue was $1.582 billion, up 13% from last year’s fiscal fourth quarter. The GAAP net loss was $3.373 billion, or $21.08 per share, as compared to $2.9 billion, or $17.02 per share, for the comparable period last year. Analysts were expecting GAAP revenues of $1.55 billion and a loss per share of 5 cents. The GAAP results included impairment charges of $3.55 billion related to goodwill and $176.3 million for acquisition-related intangible assets.

Net bookings are the company’s operational metric, and it’s defined as the net amount of products and services sold digitally or sold-in physically during the period. It includes licensing fees, merchandise, in-game advertising, strategy guides and publisher incentives. GAAP revenues don’t count revenue that is booked in the quarter but realized at later times.

The largest contributors to net bookings were NBA 2K25 and NBA 2K24, Grand Theft Auto Online and Grand Theft Auto V, Civilization VII, Toon Blast, our hyper-casual mobile portfolio, Match Factory!, Empires & Puzzles, Red Dead Redemption 2 and Red Dead Online and WWE 2K25.

As of March 31, 2025, Take-Two’s number of employees was 12,928, including 10,096 in-house development studio staff. That was up about 31 people since the previous quarter, and the rest of the company’s headcount was up about 49 people. About 22% of the staff were in low-cost locations (India, China, Turkey, Serbia, Chile, and Hungary).

“We achieved outstanding results in our 2025 Fiscal Year, with each of our labels contributing meaningfully to our performance,” said Strauss Zelnick, CEO of Take-Two, in a statement. “Our Fiscal 2026 outlook reflects continuing positive momentum, with Net Bookings guidance of $5.9 to $6.0 billion. As we bring our exciting lineup to market, including Grand Theft Auto VI in Fiscal 2027, we expect to achieve record levels of Net Bookings that will establish a new baseline for our business and set us on a path of enhanced profitability.”

In an interview with GamesBeat, Zelnick tole me some context around the announcement of the delay of Grand Theft Auto VI.

“We’re constantly seeking perfection here at Take-Two. Broadly and specifically, Rockstar Games sometimes requires more time. In this case, to deliver this groundbreaking project at the level that its fans demand.”

I asked why it was such a precise date, in terms of the new date for launching the game on May 26, 2026. Zelnick said that, generally speaking, when Take-Two announces a specific date, they stick to those dates, historically speaking.

While to me it looked like a long delay, Zelnick said that he would quibble that it was a long delay, as it was less than six months later. Since we didn’t know the original date Rockstar had in mind, we didn’t know it was a short delay. I asked if Zelnick felt like the industry was stabilizing, but he said Take-Two wasn’t reporting on how the industry was doing, only the company itself, and that it was a great fiscal year.

I mentioned that in the previous quarter we had discussed the uncertainty around tariffs. He replied, “Well, you know that tariffs have been a moving target. So far, we don’t expect tariffs will have a meaningful impact, if any, on software pricing, and therefore sales [would not likely be affected].”

He added, “Undoubtedly, tariffs could have an impact on console costs, on pricing, and anything that stands in the way of the growth of an installed base is bad news for us compared to the lack of encumbrances. So we’re hopeful that our situation will be resolved in such a way as to benefit consumers broadly.”

I asked about the higher pricing of Switch 2 titles like Mario Kart World, which will sell on the Switch 2 for $80. While not commenting on Nintendo’s pricing, he said competitors have announced variable pricing, but the company has always had variable pricing itself.

“Our job as a company, and I think the job of the industry is to deliver way more value given what we charge. And of course, interactive entertainment [delivers] so many hours of gameplay associated with titles that people love,” he said.

He noted that the goal is to offer the best value in the business in terms of price per hours played. He confirmed that Borderlands 4 is launching on PC and consoles (Xbox and PlayStation) while the Switch 2 version is coming out later but does not have a ship date yet. He said that, beyond Grand Theft Auto VI, there was no significant movement in the company’s slate for upcoming titles. Take-Two expects growth in the fiscal year 2027, which is year GTA VI will launch now, to be positive at about 5% in the midrange but the company is not spelling out a number for expected bookings in that year.

Take-Two said each of its labels contributed meaningfully to performance in the quarter.

The company said, “2K posted a fantastic quarter, with the successful launches of Sid Meier’s Civilization VII, WWE 2K25, and PGA TOUR 2K25. NBA 2K delivered one of its strongest periods on-record, including recurrent consumer spending growth of 42%. Rockstar Games excelled once again, with the Grand Theft Auto and Red Dead Redemption series surpassing our forecasts; and Zynga continued to gain momentum, led by Match Factory, Toon Blast, and Rollic’s newest hit – Color Block Jam.”

Recurrent consumer spending growth was up 14% over last year and accounting for 77% of net bookings. NBA 2K grew over 40%, while Grand Theft Auto Online and mobile both increased mid-single digits. All of these businesses greatly exceeded forecasts.

For the fiscal year, Take-Two reported net bookings of $5.65 billion, which was also the top of guidance range of $5.55 billion to $5.65 billion.

Recurrent consumer spending exceeded the firm’s outlook, growing 7%, and accounted for 80% of net bookings. NBA 2K grew high-teens; mobile increased mid-single-digits; and Grand Theft Auto Online declined modestly.

Operating expenses increased 28% to $7.5 billion, due to the impairment charges recorded during our fourth quarter. On a management basis, operating expenses rose 11% year-over-year, slightly above guidance, due to higher development costs for titles not technologically feasible. The company spent approximately $169 million on capital expenditures, which was above forecast of $140 million, primarily due to higher game technology expenses.

Division label results

2K: NBA 2K25 posted near-record performance and exceeded our forecast. To date, the title has sold-in nearly 10 million units — a 7% increase compared to NBA 2K24 during the same timeframe.

Engagement grew significantly, with Daily Active Users, MyCareer Daily Players, and Average Games Per User increasing 30%, 40%, and 80%, respectively. The company was please with the performance of brand extensions for the franchise.

NBA 2K25 Arcade Edition remains a top-5 performing title on Apple Arcade; NBA 2K Online in China continues to hold its place as the No. 1 PC sports game in the country; and NBA 2K All-Stars mobile title, which the firm developed in partnership with Tencent and launched on March 25, is maintaining the No. 1 spot on the iOS Sports Game Chart for both downloads and revenue in China.

2K’s release of WWE 2K25 was met with critical acclaim, including a score of 84 on Metacritic for Xbox Series X – an all-time high for the series on that platform. Visual Concepts introduced new features, including The Island, a highly immersive WWE-themed world where players can explore, compete in live events, and earn rewards.

Consumer appetite for the franchise is growing, with recurrent consumer spending up 20% during the quarter. This includes strong performance from WWE SuperCard, which achieved near-record levels of net bookings in March. WWE 2K25 has been integrated regularly into WWE’s televised programming and was also a cosponsor of last month’s spectacular WrestleMania 41.

In addition, 2K is bringing WWE 2K to Switch 2 this summer as well as bringing WWE 2K to mobile devices this Fall in partnership with Netflix.

2K and HB Studios successfully launched PGA TOUR 2K25, which earned a Metacritic score of 80 on PS 5 and is generating significant recurrent consumer spending growth compared to 2K24. During the period, 2K released Sid Meier’s Civilization VII, the new chapter in our esteemed strategy franchise. As stewards of the Civilization series, Firaxis Games strives to bring innovation with each new release.

Take-Two said it is confident that the development team’s ongoing efforts to update key areas of the game will deliver outstanding results over the franchise’s typically long sales cycle. The teams are pursuing opportunities to expand the audience, including the recent launch of Civilization VII VR for Meta Quest 3 and 3S, as well as the title’s upcoming release on Switch 2, which will offer new mouse controls for a highly intuitive gameplay experience.

Rockstar Games

The Grand Theft Auto series once again exceeded expectations, and to-date, GTA V has sold-in over 215 million units. Recurrent consumer spending outperformed our forecasts, growing 5% year-over-year, led by an array of new modes, rewards, and vehicles for GTA Online, as well as ongoing demand for GTA+ memberships.

Rockstar Games continues to expand the possibilities for engagement with the series through ongoing development of its FiveM creator platform. Red Dead Redemption 2 also outperformed, with Net Bookings growing 23% over last year. Rockstar Games continues to support Red Dead Online with a series of rewards that engage their community further.

Zynga

Zynga overperformed during the period, and we are pleased that their momentum is continuing into Fiscal 2026.

Peak delivered fantastic results. Match Factory exceeded our expectations, driven by first-class live-ops execution and the introduction of Mission Center, a limited-time event that drove significant player engagement. Net Bookings grew meaningfully over last quarter, and the title is generating profits.

Net Bookings for Toon Blast grew 7% over last year, primarily due to the introduction of the Cannon Fest event. The company is also thrilled that the title achieved its largest quarter of Net Bookings since Zynga acquired Peak in 2020.

Rollic’s newest hit, Color Block Jam, is scaling rapidly and is currently a top-10 downloaded game and among the top-grossing titles in the U.S. Apple App Store. In just four months of operation, the title has become profitable and is making an impressive contribution to our mobile Net Bookings.

Take-Two said it is encouraged to see stabilization in Empires & Puzzles. Small Giant improved the title’s in-game economy to support faster player progression and developed fun new features based on player feedback, like Instant Power Summon, Hero Coach, and Visiting Outfitter.

Zynga has numerous titles in development and soft launch that it said it is eager to bring to market worldwide.

The direct-to-consumer business delivered record performance, as our teams continue to launch new offers, events, and enhanced personalization, which are driving better conversion. While Zynga have been implementing DTC in our titles for some time, the company believes there is an even greater opportunity to expand this highly accretive channel given recent beneficial court rulings.

As the company approaches the three-year anniversary of its acquisition of Zynga, Take-Two said it is extremely pleased that the label has become an integral part of the company. Zynga’s core franchises are strong, and the company is energized by the team’s unique ability to launch hits in a highly competitive mobile market, demonstrating further the effectiveness of their multi-studio approach and continued excellence in Live Ops.

Outlook for FY26

Take-Two said it estimates net bookings for the FY26 year ending March 31, 2026 is $5.9 billion to $6 billion, which represents 5% growth over Fiscal 2025 at the midpoint.

This outlook assumes a continuation of our current positive trends, including healthy mobile performance and ongoing strength in NBA 2K, as well as the release of several eagerly anticipated titles, including Mafia: The Old Country and Borderlands 4.

GTA VI expectations

Rockstar expects to release Grand Theft Auto VI on May 26, 2026, which is in fiscal year 2027. Take-Two said it believes affording Rockstar additional time for such a groundbreaking project is a worthy investment.

Grand Theft Auto VI began development in earnest in 2020 following the massive success of Red Dead Redemption 2, and the title is now the most anticipated entertainment property of all time.

Consumer anticipation is unprecedented, with Trailer 2’s cross-platform debut last week shattering records to become the biggest video launch of all time, with over 475 million views in 24 hours. This follows Trailer 1’s record-breaking debut of 93 million views in 24 hours on YouTube alone. Spotify streams of the track featured in the trailer, Hot Together, by the Pointer Sisters, surged by 182,000%, once again proving Rockstar’s ability to influence popular culture.

The ambition and complexity of Grand Theft Auto VI is greater than any previous Rockstar title, and the team is poised to release another astonishing entertainment experience that will exceed players’ expectations.

Largest contributors to net bookings are expected to be NBA 2K, the Grand Theft Auto series, Toon Blast, Borderlands 4, Match Factory, Empires & Puzzles, Words With Friends, the Red Dead Redemption series, and Zynga Poker.

The company expects recurrent consumer spending to be flat compared to Fiscal 2025, and to represent 76% of Net Bookings. Our recurrent consumer spending forecast assumes high single-digit growth for NBA 2K and declines for mobile and Grand Theft Auto Online.

Release slate for the next year

During Fiscal 2026, Take-Two plans to release 13 titles, including four within the immersive core category; five mobile titles, including WWE 2K for Netflix in the fall; and four new iterations of prior releases, including the recent release of Civilization VII VR for Meta Quest 3 and 3S, as well as Civilization VII for Switch 2. In addition, our labels will continue to provide new content and experiences that drive engagement and recurrent consumer spending across many of our key offerings.

The company expects the net bookings breakdown from our labels to be roughly 45% Zynga, 39% 2K, and 16% Rockstar Games. Plan to deploy approximately $140 million of capital expenditures for game technology and office buildouts.

On August 8, 2K and Hangar 13 will introduce Mafia: The Old Country. This linear, narrative-driven game is a premium experience in the vein of early Mafia titles, set against the stunning, authentic backdrop of 1900s Sicily. Pre-orders are off to a strong start following the debut of the first official gameplay trailer at PAX East last week, and we’re excited for its upcoming launch.

2K and Gearbox will launch Borderlands 4 on September 12th. Last month, during the PlayStation State of Play, our teams shared an extended look at the action-packed gameplay coming in the title. Players were treated to a first look at two of four new Vault Hunters as they tore a path through a secret black site in Terminus Range, showcasing the destructive power of an updated gear system. The Borderlands community reacted very positively, with the game trending on X, and becoming one of the most wish-listed games on Steam. 2K and Gearbox will also release Borderlands 4 for the Switch 2 in the future.

The company will release the next iterations of the industry-leading annual sports franchises, NBA 2K and WWE 2K.

Long-term outlook

With a player-first approach and a deep commitment to quality, the company said it strives to create the best entertainment experiences for global communities and to redefine the art form.

As the company brings its exciting lineup to market, including Grand Theft Auto VI in Fiscal 2027, the company expects to achieve record levels of net bookings that will establish a new baseline for the business and set it on a path of enhanced profitability.

Pipeline FY26-FY28

The company is extremely optimistic about its upcoming pipeline, which includes approximately 38 titles between Fiscal 2026-2028.

Looking ahead, the company currently expects to deliver 25 titles throughout Fiscal 2027 and 2028 including: 17 immersive core releases, including Grand Theft Auto VI and five sports simulation games; four mobile games; and four new iterations of previously released titles.